AI Isn't Just Spying on You. It's Tricking You into Spending More

https://newrepublic.com/article/204525/artificial-intelligence-consumers-data-dynamic-pricing

by c420 • 7 months ago

105 65 7 months ago

tantalor• 7 months ago

This has been true for decades.

I recall my university classes in mid 2000s talking about examples of machine learning models for grocery store purchase patterns.

probably_wrong• 7 months ago

You may be thinking about this article about how Target knew that a woman was pregnant before her family knew: https://news.ycombinator.com/item?id=3598558

I wish we had an update on what the situation looks like today.

measurablefunc• 7 months ago

They have even better psychometric profiles on everyone now than they did previously. This is why Zuckerberg can confidently tell people during an interview that he knows they want at least 15 friends¹ & he is going to deliver those friends to them w/ his data centers.

¹https://www.linkedin.com/pulse/why-mark-zuckerberg-thinks-yo...

heavyset_go4• 7 months ago

Go over to friend's place and watch the ads they get, you'll get a good idea of what kind of health concerns or illnesses they may have.

So far, in situations where it wouldn't be rude to ask, I've been able to determine with pretty good accuracy that at least someone in the household has the advertised health concerns.

You can also get an idea of their financial situation, given what buckets advertisers put them in and what they're advertised, as well.

Similarly, advertisers know when you're at friend's location, or elsewhere, and may show ads tailored to your profile.

gruez4• 7 months ago

You may be thinking about this article about how Target knew that a woman was pregnant before her family knew: https://news.ycombinator.com/item?id=3598558

"before her family knew" is a pretty low bar to clear, especially if the daughter was actively trying to hide the pregnancy (eg. by wearing baggy clothing). Moreover if we're taking the example of this specific story, where the women presumably knew she was pregnant (as opposed to the more sensational story of "Target figured out a women was pregnant before she even knew!!1!" that also makes the rounds), it's not hard to imagine how Target might be in a better position to infer her pregnancy without being galaxy brained or creepy. Take the examples given in the article:

Take a fictional Target shopper named Jenny Ward, who is 23, lives in Atlanta and in March bought cocoa-butter lotion, a purse large enough to double as a diaper bag, zinc and magnesium supplements and a bright blue rug.

hamdingers• 7 months ago

I wish we had an update on what the situation looks like today.

My wife and I spent 3 years in fertility treatments, which involves a lot of online activity similar to that of someone newly pregnant (buying pregnancy tests, researching symptoms, etc).

We were constantly bombarded with pregnancy related advertising, it really ramped up after the first year. Tons of "congratulations" cards, coupon books, "new mom" magazines, up to and including unsolicited shipments of formula and branded blankets.

So to answer your question, it's still happening, and it's disgusting. I strongly suspect Carrot Fertility sold our information because the peak of it all happened a couple months after I gained access to them through my employer.

(We did eventually succeed, our baby is nearing 6 months)

majormajor3• 7 months ago

The miss rate is still wildly high based on the ads in my instagram feeds.

But the really-good hits are probably tough to notice. They won't stand out as "boy this is a stupid ad" and even if I just scroll past a well-targeted ad, it's probably doing its job of making that company/product a bit closer to the top of mind...

skybrian• 7 months ago

It’s a meme that will never die, but there’s no proof it ever happened:

This story doesn’t even show that Target tried to figure out whether the girl was pregnant. It just shows that she received a flyer that contained some maternity items and her weird dad freaked out and wanted to talk to the manager. There’s no way to know whether the flyer arrived as a result of some complex targeting algorithm that correctly deduced that the girl was pregnant because she bought a bunch of lotion, or whether they just happened to be having a sale on diapers that week and sent a flyer about it to all their customers.

https://medium.com/@colin.fraser/target-didnt-figure-out-a-t...

dragontamer• 7 months ago

I continuously get Spanish advertisements despite being unable to speak Spanish. (The only foreign language media I visit on YouTube is Anime/Japanese and Germans stuff).

There are surely large numbers of dumb cases of being mispredicted out there in.

mingus882• 7 months ago

Yeah AI is taking a lot of damage when the actual problem is capitalism

palmotea2• 7 months ago

Yeah AI is taking a lot of damage when the actual problem is capitalism

And I think it's fair to to throw flak in AI's direction, if what it does is make capitalism less tolerable by removing some of the "inefficiencies."

While apologists for capitalism have done a good job of pushing me towards wanting to burn it all down, I doubt that's in the cards any time soon and limits on AI technology are far more likely.

vjvjvjvjghv• 7 months ago

AI is just another tool to implement a trend that has been going on for quite a while, probably starting with massive data collection through the internet. I think it’s only a matter of time until we will be seeing individualized pricing everywhere, including retail like grocery stores or gas stations

Maybe I am getting paranoid. But to me a lot of innovation in the last years feels openly hostile and primarily designed to extract maximum money while providing only little actual benefit. AI will just accelerate this trend.

TSiege• 7 months ago

More perfect and consumer reports did a joint investigation and have uncovered this already happening.

https://youtube.com/watch?v=osxr7xSxsGo&pp=0gcJCR4Bo7VqN5tD

IAmGraydon• 7 months ago

Maybe I am getting paranoid. But to me a lot of innovation in the last years feels openly hostile and primarily designed to extract maximum money while providing only little actual benefit. AI will just accelerate this trend.

This is the natural evolution of capitalism in a system where regulation is weak. Political donations from companies need to be outlawed and the proper regulatory environment restored. Capitalism is like a powerful engine that will happily rev to redline and tear itself apart if the engine lacks a governor. Regulation is that governor.

charlie-83• 7 months ago

It annoys me that big-tech marketing has made most people believe that "personalised advertising" means they get ads which are more "useful" to them. I regularly see people opt in to personalised advertising because of this.

Personalised advertising is about collecting every detail about your life and using it to extract as much money as possible from you. AI advancements might be making this even more effective but it's been this way for a long time.

1vuio0pswjnm7• 7 months ago

"It annoys me that big-tech marketing has made most people believe that "personalised advertising" means they get ads which are more "useful" to them."

"relevant" is another term seen in addition to "useful"

But "relevant" is relative

For example, "relevant" to what?

It's only if Big Tech has collected data about the ad target and, e.g., made some guess about their intent, that the ads could be "relevant"

Whether the ads are truly "relevant" is a question for the reader. The term "relevant" might just be marketing fluff

Either way, Big Tech will keep the data vacuum humming

gretch• 7 months ago

Well I can list some things which are completely irrelevant (happens even in online ads despite the advancements).

I got an offer for life insurance for US veterans - I’m not a US veteran so this has nothing to do with me.

I got an ad for women’s hygiene products, but I’m not a woman. So that’s completely wasted on me.

I just bought a mattress, and I don’t need a 2nd mattress, so all of those are irrelevant.

hibikir• 7 months ago

Where the AI makes a difference here isn't regular personalized advertisement (which already isn't all that great, based on the percentage of ads I get for products I would never consider at all, or are downright offensive to me), but in understanding your existing consumers, and attempting to do habituation effects.

So imagine you have a bunch of money, watch sports while drinking and are bad at math, and therefore are considered to be a great target for sports betting companies. Making sure you get used to betting most of the time you watch a game is very valuable for the company, so just realizing what teams you like, when they play, and what kind of bets might look good to you, but are really pretty iffy is very valuable to them. Just like they would love to know when you are bored, or depressed, and maybe betting on the game that is going on right now would be appealing: A level of access to you that, say, a casino, or a bar that you haven't visited in a while just doesn't have. And habituation models are simple, you don't need a very expensive system to know when offering you a discount to entice you to don't break a gambling streak will pay off

Now that is using AI in ways that are quite antisocial by most standards: the current advertisement that tries to sell me hair growth when I have all my hair isn't all that scary.

pixl97• 7 months ago

Yep attacking gamblers is definitely one way to use AI.

Also there are plenty of other possible ways if you have the information. Think of people going thru breakups. People with eating disorders or other forms of body dismorphia, you could throw rather horrific ads at them.

hansvm• 7 months ago

This is one of those places where it's worth disentangling the status quo from an optimal alternative.

Currently, every factlet you leak to one of these systems poisons them toward their profit (and almost unanimously against your best interests). Advertising draws your attention away from the products that would make your life better (cheaper, heathier, tastier, whatever) and toward profitable alternatives.

It doesn't have to be that way though. You physically don't have time to research every thing that exists, or even to hear about every possible product in passing. Supposing some of those would improve your life on average, is word-of-mouth really the most efficient way we can come up with to tell you about the things you do actually want to spend your money on? In theory, this is a great business -- customers want to spend money, companies want to sell things, and the information/discoverability asymmetry means that companies are inclined to get word of their products out there with customers _also_ wanting to hear about those products (if they're sufficiently personalized). If "advertising" were good enough, I'd pay money for it.

That only falls apart because of a lack of trust and ethical behavior. Instead of being treated like the information market it is, it's thrust onto individuals to try to prey on their weaknesses.

palmotea2• 7 months ago

It doesn't have to be that way though. You physically don't have time to research every thing that exists, or even to hear about every possible product in passing. Supposing some of those would improve your life on average, is word-of-mouth really the most efficient way we can come up with to tell you about the things you do actually want to spend your money on?

Word-of-mouth vs. paid advertisements is a false dichotomy.

Also, a friction isn't a bad thing. You don't have to "research every thing that exists, or even to hear about every possible product in passing." It's fine to pick a good enough thing from a smaller set.

In theory, this is a great business -- customers want to spend money, companies want to sell things, and the information/discoverability asymmetry means that companies are inclined to get word of their products out there with customers _also_ wanting to hear about those products (if they're sufficiently personalized). If "advertising" were good enough, I'd pay money for it.

Advertising not a great business in theory, because it's corrupted by a fundamental conflict of interest. Without draconian regulation, it's never going to be aligned to your interests as a consumer.

A better business would be some kind of product review magazine, where they research products and write articles about them.

Personally, I favor draconian regulation. Nationalize the ad agencies. Companies submit a request to the government ad agency for an add, they write a neutral ad with a couple of photos descriptive photos of the product, its name, and a brief outline of features, and that's what gets run.

phantasmish• 7 months ago

Opt-in product catalogues are fine for that. Plenty.

heathrow838292• 7 months ago

if you draw a venn diagram of all the stuff i get advertised on and all the stuff I actually buy, the two circles are in completely different locations with virtually no overlap whatsoever. the only time i get ads that are even remotely related to my purchases, are only ads that come after I've made the purchase and am done. personally, i don't see how they make any profit off me whatsoever.

dylan6042• 7 months ago

Maybe you're confusing who is meant to be making the profit. The people lying to you about receiving relevant, personalized ads are telling the same lie to those buying ads. The ad company tells both sides the lie and their profits are soaring.

nitwit005• 7 months ago

As long as there's some company willing to bid the minimum amount, they'll happily serve up those ads.

I have YouTube ad personalization off, and sometimes get frequently repeating ads. I suspect when that happens, they are the only bidders.

heathrow838292• 7 months ago

i think the whole "personalised advertising" thing is way oversold and more for the benefit of a sales pitch for the advertisers but reality is far from it. google makes their money on volume, not accuracy. and so all the "information" they collect, doesn't seem to translate into more targetted advertisement.

themafia2• 7 months ago

It annoys me that there aren't laws to prevent this. Or that anti-monopoly law wasn't effectively used to separate the largest advertising company in the world from a consumer software browser product which is clearly being used to facilitate and amplify these outcomes.

I'm thoroughly annoyed that adblockers aren't installed by default and require an opt out to disable. This will not at all touch first party advertising, but, it will put a huge dent into dynamic third party advertising. Which seems to be the source of the problem you describe.

Our government is genuinely failing to represent the majority on this issue.

buu7002• 7 months ago

To be fair, if I choose to buy something, it's almost by definition because I consider the thing useful. It's pretty rare that I purchase something I'd learned about from an ad, but I have done so a few times and benefited from doing so. How is anyone else to determine whether I've been adversely manipulated, i.e. whether the cost of the thing outweighs its benefit to me?

Buying something from an ad isn't really fundamentally different from being influenced by an HN post. For example, thanks to https://news.ycombinator.com/item?id=46294574, I read up on and have decided to experiment with TLA+ on my next project. It's really no concern of mine what Martin Kleppman's commercial interests may ultimately have been in publishing that blog post; I received value from the information all the same.

Personally, I'm not particularly bothered by ads per se. I'd be more bothered by information being withheld from me during searches, e.g. if Brand A could pay Amazon to delist Brands B and C from organic search results, since that would directly guide me toward less optimal purchases. But as far as simply going about my day and seeing a billboard or promoted social media post every now and then, I don't see the big deal. It's generally easy to ignore, it costs me almost nothing, it occasionally helps me, and ultimately it funds a lot of things I like and take for granted (e.g. Chromium, Firefox, and Android).

I'm not saying that people who routinely waste money on irrational purchases don't exist. I just don't find that to be a compelling argument against the existence of a particular market which overwhelmingly benefits almost all of us.

I do have quite strong concerns regarding aggressive data collection, however, and I certainly wouldn't opt in to greater erosion of my privacy — but I see that as a separate issue. To the extent that ad-driven revenue models provide an incentive for companies to facilitate greater privacy invasion, I agree that it's a significant concern which warrants much stronger pushback from the public than it receives. I just think it's important to highlight that mass data harvesting per se is the major issue, more so than any perceived manipulativeness of the fact that brands pay money for exposure.

Then of course there's the issue raised in this post, which is yet again another matter entirely. I'm all for using AI to optimize pricing and efficiency, but "dynamic pricing" as described in the article sounds like a euphemism for price discrimination, and should be more strictly regulated IMO regardless of whether or not AI is involved.

gessha• 7 months ago

Is it possible that most people are like you and advertisers don’t make money off you but there’s a small amount of people where advertising works and advertisers make big money off those people?

snorbleck• 7 months ago

ahh yes. it's not just this, it's that.

standardUser• 7 months ago

The real tragedy is that we don't already have regulations already on the books in response to the endless data-hoarding that's been inflicted on us since at least the first tracking cookie.

vivzkestrel2• 7 months ago

why doesnt someone make a coinmarketcap for grocery prices across all the stores and update it in real time?

handoflixue• 7 months ago

Where are you finding the API to get these prices?

Paying an individual to physically go to the store and check the prices on every good is presumably pretty expensive even if it's just quickly scanning each isle with a special phone app

vivzkestrel2• 7 months ago

what if we could incentivize the grocery store employees themselves, i am sure nobody minds earning an extra hour of work

AI Isn't Just Spying on You. It's Tricking You into Spending More

Related Stories